Bangalore Tiger – Wipro On the Prowl

I love business books – especially the kind where arguments take place, accusations are flung about, people clank swords and pound on the table, some guy (who has it coming) gets his ego smashed to smithereens and we, the reader, get down on our knees to be thankful that we don’t work in an unwashed fish tank like the one described in those pages.

Of course, that isn’t how I’d describe Bangalore Tiger: How Indian Upstart Wipro Is Rewriting the Rules of Global Competition. BusinessWeek senior writer Steve Hamm’s profile of one of the top India IT and business process outsourcing service providers actually opens with the head of that company ringing the opening bell for the New York Stock Exchange. That’s as clamorous as it gets.

Yet the value of Hamm’s book is in how it quietly goes about portraying Wipro’s methodical efforts to dominate the services arena, especially in the outsourcing and offshoring segments. Much of the company’s magic resides with Chairman Azim Premji, who has laid out company principles that drive Wipro to improve itself in a thousand little ways on a daily basis. The greater goal: to become one of the top 10 IT services companies in the world by 2009. (At the time that goal was set, it was number 16.)

The writer describes how Wipro changed the rules of outsourcing in the early part of this decade – and continues doing so.

For example, remember the days when outsourcing deals involved moving huge amounts of capital equipment and people to the service provider and getting them off the client books? That hardly ever happens anymore. Wipro doesn’t buy the gear and, in fact, clients “remain in charge of strategy and purchasing decisions, so they retain control over their technology fate.” No huge outlays of cash every time a client signs a contract.

Likewise, the company has created a huge number of tools and methods for automating the system monitoring and maintenance that takes place in running a data or network center. That means the daily work of operations can happen continents away – no need to have staff on site at the client facilities. These were huge shifts in how outsourcing played out for the participants. As Hamm describes, “One by one, Wipro dealt with [customer] concerns.”

Whereas consulting continues to be a sizable portion of revenue-generation for the largest service providers in the United States, Wipro discovered (under former vice chairman Vivek Paul) that its operating margins were higher in software development. So that’s where it places its emphasis; it makes the other available as an “ingredient,” but not as a mainstay business on its own, unlike the traditional approach of the major providers, which tend to put a large number of consultants on a client job.

If you’re curious about how India firms recruit, train and retain hires, Hamm spends a great deal of text explaining the Wipro way. For example, in a partnership with a Bangalore institute, Wipro offers a master’s degree in software engineering that takes four years to complete and is available free of charge to a segment of new employees with bachelor’s degrees in science or math. What’s the big deal? That means the company holds onto presumably good people for at least four years – a big deal when competitors literally stand outside the company gates to lure away employees with higher wages and greater benefits. For call center employees – motivated not by their work but by short-term dreams such as getting the latest cell phone – the new service line head trained supervisors to teach their staff to “aspire to something and show them how they could gain, long term, from working at Wipro.” But he did this after taking groups of the call center workers out for lunch and dinner meetings to talk with them and listen to their aspirations.

Wipro is a model of efficiency. It has an amazing 97-97 percent utilization rate for its staff; that compares to 65 percent for Western service providers, according to Hamm. When somebody isn’t being used on the job, they’re kept back in India where they either work out of the home office or go through a training program. For example, programmers may “upgrade their knowledge about the business dynamics of particular industries, or learn foreign languages.”

Ever wonder why you never see Wipro in commercials or ads? Outside of India, says, Hamm, the company spends not a dime on advertising. After all, it has identified the top 1,000 companies in the world as its potential clients, which means it needs to communicate with a few thousand people at most. Branding campaigns aren’t the optimal way to reach such a targeted audience.

If you think this is a book that idealizes the Wipro way, you’d be wrong. Hamm does a serviceable job of laying out the challenges the company faces. For instance, there’s very little company orientation or on-going communication for non-Indians hired to work in offices in North America and Europe. Therefore, they tend to feel disconnected from the company culture.

Likewise, the author points out that for Wipro, “celebrating doesn’t come naturally” and that it could stand to lighten up a bit. Contrast that with Infosys, which put on a huge party when it hit the $1 billion revenue mark a few years ago. Along with performances by pop singers and celebratory dinners, the company handed out $25 million in bonuses, between $500 and $5,000 for every employee. When Wipro hit that mark, nothing happened. As Hamm writes, “It had never looked at $1 billion as a special target or milestone, so why throw a party?” Which company would you want to work for?

He also says the firm needs to “spruce up some of its international offices… [typically] in second-rate locations [with substandard] dcor and amenities.”

Hamm describes some of the tools that Wipro uses to track its performance, including AIMS, the Agile Integrated Metrics Scorecard, which takes progress reports from programmers and compares them to project management milestones. But while the author calls AIMS a “powerful management tool” for allowing managers to view the progress of an entire project and drill down on trouble spots in 42 dimensions (the number of metrics tracked), he also says that Wipro delivers monthly reports to clients. I have trouble believing that monthly updates are sufficient. Why not simply open up the reporting to the clients, so they can track progress in real-time? (Yes, it would take a bit of education on the part of Wipro to ensure that clients don’t fall into knee-jerk responses every time a daily deadline is missed, but a month in an agile environment is a long period.)

This is a worthwhile book to read if you’re in a competitive position or you’re a potential client. Its biggest value is to provide details for the impressions we all have about how Indian companies operate on the ground and do the remarkable things they do. But it’s written by an American. What I’m still waiting for is the tell-all book written by one of the India-based geniuses of the service industry who can share an inside peek at this business of services from the other side of the ocean.